I don't recognize it with certainty but it could be a radio interference supressor (a capacitor). These were usually attached to the Generator itself. It appears to be connected to the B+ terminal on the Voltage Regulator (yellow wire). Where does the dark wire (brown?) with the yellow insulated stak-on connector lead to?
Does your Veloce have an old set of air horns? It may simply be a sealed fuse installed as a power supply for an option such as this.
Both of my '65 Spider Veloces have that part, but my '63 Normale did not. It is indeed a Bosch capacitor (the rating in microfarads is stamped on it), but I've never figured out what it does either. By now, I should have just disconnected it to see what happens, but that item hasn't floated to the top of the list yet. Oh, neither car has a radio, so it wont matter anyway if it's just a suppressor.
Yes, you fellows are quite correct. It is radio condensor. The Giulia has a Blaupunkt radio installed and according to my Mercedes buddy, thats one of theirs. Thanks for all the help.
She is presently undergoing having new engine bits and replacing most all the worn parts.